Sen. Claire McCaskill’s vote against the Senate’s tax reform plan shouldn’t surprise anyone who has followed her career. While she teased Missourians that she might come around and support the bill if Senate leaders would just “toss out this proposal and start fresh,” her “No” vote was never really in doubt.
So we fully expect that whatever final bill emerges once the House and Senate meet to iron out their differences, McCaskill will oppose that, too. Which is odd because just a few years ago she was fulsome in her praise of a tax reform bill that contained nearly every provision she so strenuously objects to now.
It was called the “Gang of Six” plan and McCaskill told St. Louis Public Radio it “moves us towards a flatter tax, a fairer tax, and a tax that I think will spur economic development because it will remove so much of the complexities [sic] in the tax code.”
Let’s examine the Gang of Six plan’s features and compare them to the GOP plan McCaskill couldn’t bring herself to support.
A fact sheet put out by the Gang of Six says “if CBO scored this plan, it would find net tax relief of approximately $1.5 trillion.” What a coincidence! The Senate tax reform bill also is a net $1.5 trillion tax cut. Still, McCaskill worries that this $1.5 trillion tax cut “explodes our deficit,” a complaint she didn’t have with her Gang of Six plan.
What about “tax cuts for the rich,” a standard McCaskill talking point? The Senate plan she opposes cuts the top tax rate to 38.5 percent from 39.6 percent. But her Gang of Six plan would have cut the top tax rate paid by the highest earners to – are you ready for this? – at most 29 percent and perhaps as low as 23 percent!
Regarding retirement and health care programs, McCaskill co-signed a letter to President Donald Trump saying that she would “not support any effort to pass deficit-financed tax cuts, which would endanger critical programs like Medicare, Medicaid [and] Social Security.”
But the Gang of Six proposal would have made dramatic cuts to all those programs, prompting AARP to say McCaskill’s plan would “trim future Social Security checks, end a new program for long-term care insurance and shake half a trillion dollars out of the Medicare and Medicaid systems.”
We could go on and on. McCaskill’s Gang of Six plan would have significantly cut the corporate tax rate (to between 23 and 29 percent) and moved the United States to a territorial system (which means businesses can’t be taxed on what they earn in another country). It would have ended the alternative minimum tax, kept the child tax credit, and maintained the progressivity of the tax code.
The Senate plan McCaskill just voted against does all those things, and in fact would result in a far more progressive tax code than the Gang of Six plan.
So what on earth stopped McCaskill from supporting the Senate’s tax reform plan?
Politics. Democrats believe that if they can deny Republicans and President Trump a victory on tax reform, they can take back the Senate in next year’s election. It doesn’t seem to matter that doing so would deny Missourians and all Americans the benefits of lower tax bills and growing incomes.
And those benefits are significant, with a Boston University study estimating that reducing the corporate tax rate to 20 percent would increase wages $3,500 annually, on average, per working American household.
Imagine what struggling Missouri families could do with another $3,500 a year – and that’s not even counting what they would save on their taxes.
And yet McCaskill wrings her hands and looks for excuses to deny her fellow Missourians a much-needed economic and financial boost. The pull of her party bosses in D.C. proved too strong. Disappointing, but not surprising.